Mormugao port approves Gammon coal-berth bid

A file photo of iron ore being loaded on a barge in Goa. The project is a relief for Mormugao port after a ban on iron ore mining in Goa crimped export of the commodity through the port since September. Photo: Abhijit Bhatlekar/Mint

Updated: Fri, Dec 07 2012. 08 18 PM IST

Bangalore: The trust that runs the Union government-controlled Mormugao port in Goa on Friday approved the bid of Gammon Infrastructure Projects Ltd to mechanize a berth to handle imported coal.

The project is a part of the shipping ministry’s plan to raise cargo-handling facilities at its ports by 245 million tonnes (mt) to 942.27 mt by March.

Mumbai-listed Gammon had emerged as the highest bidder by placing a revenue share price bid of 33.66%. The bids were opened on 27 November.

“The board of trustees of Mormugao port approved the price bid of Gammon Infrastructure today,” said Motilal Ragunatha Dessai, a trustee who attended the meeting.

The board had deferred a decision last week following objections by JSW Infrastructure Ltd, the only other bidder. Labour unions have been opposed to the privatization of the berth.

Gammon Infrastructure has to invest about Rs.300 crore to install equipment at berth 11 of the port to handle 2.3 mt of coal a year.

The project will bring some relief to the struggling Mormugao port after a ban on iron ore mining in Goa crimped export of the steel-making commodity through the port since September. Iron ore is the main commodity shipped through Mormugao and accounted for about 80% of the port’s volume.

Between April and October, the port loaded 13.4 mt of cargo, a drop of 32.9% from the 20 mt it handled a year ago. The ban on mining and the resultant lack of cargo cut iron ore loading at the port by half to 7.4 mt during April-October, from 14.7 mt in the same period last year.

The Goa State Pollution Control Board had recently halted coal handling at two of Mormugao port’s berths, citing a lack of mechanized loading facilities and the resultant pollution that led to protests from people residing around the port.

The Goa high court has given Mormugao port time till 2014 to install mechanized loading facilities to be allowed to continue handling coal at the port.

The Mormugao project win will help Gammon Infrastructure expand its port business. It already runs a multi-commodity facility at Visakhapatnam port in Andhra Pradesh, and is developing a container terminal at Mumbai port that will become operational in 2014.

Gammon is also a stakeholder in a consortium that was awarded a 30-year contract in 2009 to build an iron-ore loading facility at Paradip Port in Orissa.